THE STRATEGIC MANAGEMENT PROCESS.

1)
DEFINITION
Strategic management is the management of an organization’s resources to
achieve its goals and objectives.
Strategic management involves setting objectives, analyzing the competitive
environment, analyzing the internal organization, evaluating strategies, and
ensuring that management rolls out the strategies across the organization.
The strategic management process is more than just a set of rules to follow. It is a
philosophical approach to business. Upper management must think strategically
first, then apply that thought to a process.

1: The Plan Phase of the Strategic Management Process

The first part of the strategic management process involves figuring out what you
want to accomplish, and how you're going to get there. The Plan phase can be
further broken down into the following subsections:
1.1: High-Level Goal Setting
High-level goal setting encompasses the process of defining what you want to
achieve in the big-picture sense.
Clarify Your Vision
The purpose of goal-setting is to clarify the vision for your business. This stage
consists of identifying three key facets:
First, define both short- and long-term objectives.
Second, identify the process of how to accomplish your objective.
Finally, customize the process for your staff, give each person a task with which he
can succeed.
Briefly, the main reasons why defining your vision is so critical for the strategic
management process are:
 It gets all parties on the same page about what the organization is ultimately
trying to achieve.
 It helps to create an identity around your brand, product, people and
customers.
2)
1.2 Strategic analysis & understanding your environment
Now that you've got a high level vision for your organization, it's time for a quick
reality check. You need to make sure that you have the capabilities to actually
execute on that vision. You also need to make sure that your vision is one that is
compatible with the external realities of the world.
Internal Strategic Analysis
Let's start by looking inward, at our own capabilities. We do this by performing an
internal strategic analysis. Ask yourself questions such as:
 Do we have the necessary people and skill set to deliver against our goals?
 Do we need or have the necessary capital to fund our ambitions?
There are a range of tools that you can use to perform an effective internal analysis
- but the key is to be brutally honest about your own capabilities so that you can
either solve your deficiencies or adjust your goals accordingly.
External Strategic Analysis
Moving on to the external strategic analysis side of things, here we need to turn our
gaze outside of the organization to things like:

 The macro-economic environment

 Our competitors
 Regulations and compliance
 Customer trends
 Market trends
In other words, we need to consider factors which are potentially outside of our
control and how they will affect the viability of our goals.

3)
SWOT Analysis
One of the most famous ways of doing both internal and external strategic
analyses, is through a SWOT Analysis. This technique forces you to go through an
exercise which considers:
 Strengths: What are you good at? What skills do you have as an
organization? You should be looking to amplify these skills throughout your
strategic management process.
  Weaknesses: What aren't you good at? Why have you failed in the past?
You should be looking either to solve for these weaknesses or worst-case,
avoid situations where they could hurt you.
 Opportunities: What are the unique opportunities that you can exploit in the
market? Which of the strengths that you've outlined give you an edge and
how will you utilize them? You should be looking to rapidly capitalize on
these types of opportunities.
 Threats: What aspects are there in your environment that could hurt your
ability to exploit opportunities? Are there are any macro or micro economic
issues that you need to be aware of? You should be looking to mitigate for
these threats wherever possible.

Generally speaking - understanding your strengths and weaknesses are internal

strategic analysis exercises. Understanding your opportunities and threats involves
looking outside of your organization - at things like the economic and political
climate, competitors, market dynamics, etc.
2. Formulate a Strategy
The first step in forming a strategy is to review the information gleaned from
completing the analysis. Determine what resources the business currently has that
can help reach the defined goals and objectives. Identify any areas of which the
business must seek external resources. The issues facing the company should be
prioritized by their importance to your success. Once prioritized, begin formulating
the strategy. Because business and economic situations are fluid, it is critical in this
stage to develop alternative approaches that target each step of the plan.

4)
3. Implement Your Strategy
Successful strategy implementation is critical to the success of the business
venture. This is the action stage of the strategic management process. If the
overall strategy does not work with the business' current structure, a new structure
should be installed at the beginning of this stage. Everyone within the organization
must be made clear of their responsibilities and duties, and how that fits in with the
overall goal. Additionally, any resources or funding for the venture must be secured
at this point. Once the funding is in place and the employees are ready, execute
the plan.
4. Evaluate and Control
Strategy evaluation and control actions include performance measurements,
consistent review of internal and external issues and making corrective actions
when necessary. Any successful evaluation of the strategy begins with defining the
parameters to be measured.
These parameters should mirror the goals set in Stage 1. Determine your progress
by measuring the actual results versus the plan.
Monitoring internal and external issues will also enable you to react to any
substantial change in your business environment. If you determine that the strategy
is not moving the company toward its goal, take corrective actions. If those actions
are not successful, then repeat the strategic management process. Because
internal and external issues are constantly evolving, any data gained in this stage
should be retained to help with any future strategies.

5)
5. Value of organizational culture
Organizational culture can determine the success and failure of a business and is a
key component that strategic leaders must consider in the strategic management
process. Culture is a major factor in the way people in an organization outline
objectives, execute tasks and organize resources.
To be effective in your implementation of a strategic management process, you
also need to commit to certain core values in your organizational culture:

 Transparency: You need to be willing to be open with your employees and

colleagues. If people feel as though you're only giving them half the story
when it comes to the strategy or the results, it's unlikely that they'll fully
embrace the new strategic management process.

 Empowerment: You'll also need to be willing to trust people to formulate

and execute on their own parts of the strategy. Micro-managing every level
of the strategic plan is going to be increasingly unworkable as your
organization grows.

 Collaboration: It sounds obvious, but your strategic management process

can only succeed when coupled with a culture of collaboration and sharing.
People need to be willing (and also have the tools) to share information
efficiently and with clarity.
It is important to create strategies that are suitable for the organization's culture. If
a particular strategy does not match the organization's culture, it will hinder the
ability to accomplish the strategy's intended outcomes.

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